October 17, 2017
Does your company’s technology strategy support your business operations? Do you have an IT growth or maturity plan? Does it align with and support your company’s growth strategy?
Nearly every major advancement and innovation in business for the last 15 years has been enabled by technology, specifically network technology. Businesses of all sizes have seen significant advantages from the developing network economy, such as: access to competitive online services and service software, comprehensive information management systems, increased outsourcing potential, and reduced entry barriers.
Let’s be clear, your network and the team that supports it, enable and support every other function in your company. This is important because, no matter what your strategic objectives are, your network is going to be crucial in reaching them. In order to be an asset to your company’s strategy, your network must be continually developing to cut costs, manage content, reduce downtime, and most importantly: protect your information.
IT Strategy is the series of technology goals and objectives that drive your technology to support your business strategy by achieving improvements in: cost, efficiency, reliability, security, and user support.
Most companies’ IT service is delivered via one or more of the following:
Insourced vs. Outsourced
The top row describes staff-driven IT service at different levels of maturity. These companies are paying for staff, training staff, organizing and managing staff, equipping staff, and hoping that these support staff members maintain and develop the IT infrastructure that powers the whole business.
The bottom row describes outsourced service provision. Companies that choose this route contract their support and service needs out to external organizations. Mature, performance-based service is measured along predefined service level agreements.
To summarize: when your work is insourced, you’re paying for staff. When your work is outsourced, you’re paying for service.
Scope & Scalability
The difference between scenarios 1 & 3, and 2 & 4 is scope. The former group maintains enough resources and personnel to maintain the companies IT situation, but not enough to develop and grow the company’s IT infrastructure. Scalability suffers when maintenance is the prime directive, and if a company tries to simply maintain for too long they will find that their IT capabilities and support start to degrade over time.
However, 2 & 4 provide the skills, resources, and oversight to pursue continual development and operational improvements. Over time the advantages from a development oriented service model include: lower downtime, data security and validation, process efficiency improvements, and possibly access to massive business opportunities provided by big data and analytics.
As mentioned above, companies can choose to support their internal operations with outsourced support. The contracted IT professionals can be used to fill gaps in IT service coverage, assist with help desk support, or even work concurrently to update systems and software while reducing waste and procedural inefficiencies. Alternatively, the contractors can work alongside the in-house teams on their operations. Be cautious, however, as this type of intermingling can often lead to scope creep and can strain your expectations and relationship with your contracted providers.
- Your supplier assumes responsibility for the execution of IT operations.
- Operational objectives are defined clearly in the contracted service level agreement.
- Committed to the term and scope of the contract.
- Supplier assumes all operational risks within their scope.
- Pricing based on service levels. (Cost tied to outcomes.)
- Long-term service commitments support strategic
- IT supports and enables nearly every functional department in your company.
- IT service is measured along five dimensions: cost, efficiency, reliability, security, and user support.
- Good IT service provides smooth, efficient operations, economies of scale, and opportunities for strategic advantage.
- Poor IT service increases costly downtime, limits productivity, development, and strategic growth.
- IT service can be insourced, outsourced, or both (out-tasking/staff augmentation).
- Insourced IT is great for large companies who have the capital for a full IT department, and who require explicit control over their data and servers.
- Staff augmentation works well for companies in transitory periods, but isn’t suited well as a long-term IT solution.
- Outsourced IT is an excellent solution for SMBs in a growth phase, or for companies whose in-house IT is ineffective or in turmoil.